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Fuji Heavy Industries Shares Rise

Posted by Acejam on

Nov. 25 (Bloomberg) — Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, rose the most in three weeks in Tokyo after Barclays Capital rated the company “overweight” and Merrill Lynch & Co. upgraded it to “buy.”

Tokyo-based Fuji Heavy rose 29 yen, or 10 percent, to 318 yen at the close of trading in Tokyo.

U.S. Subaru sales are up 2 percent so far this year, helped by its revamped Forester sport-utility vehicle, sales of which surged 28 percent in October. Fuji Heavy, a “bright constellation in a dark sky,” is the only Japanese carmaker that may surpass its profit forecast, according to Merrill Lynch analyst Koichi Sugimoto.

“The success of the Forester and contribution from other new models are set to be compounded by greater-than-expected synergies with Toyota,” Sugimoto wrote in a report dated Nov. 21.

Toyota, which nearly doubled its stake in the smaller carmaker to 16.5 percent in July, will use a Fuji Heavy plant in Gunma Prefecture, north of Tokyo, to build a small sports car. Japan’s largest carmaker first bought a stake in Fuji Heavy in 2005 and began making Camry sedans at the smaller carmaker’s factory in Indiana. Fuji Heavy will also buy compact cars from Toyota and Daihatsu Motor Co. to sell under its own brand.

Fuji Heavy expects net income will fall 46 percent in the year ending March 31 to 10 billion yen ($104 million). The company kept its forecast unchanged when it announced earnings on Oct. 31.